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Private spaces may incur development charges

Jan 10, 2013

“An artist's impression of Forestville executive condominium in Woodlands, one of EC developments under the spotlight for selling 'free spaces' like roof terrances.

SINGAPORE - Developers may be saddled with additional development charges if private roof terraces and enclosed spaces are included under the gross floor area (GFA), said Lee Lay Keng, associate director of research at DTZ.

"One possible measure could be that private enclosed areas like the patio for ground floor units, or roof terraces for penthouses could be chargeable for developers," said Ms Lee, who was part of a discussion panel at the DTZ Property Seminar 2013 on Tuesday.

Ms Lee was responding to a question about possible measures that the government might roll out in the coming year.

Currently, developers of all non-landed private developments and executive condominiums (ECs) do not have to pay development charges for outdoor spaces that are open to the sky as they are not considered part of the GFA.

Despite public indignation over such super-sized EC units, "developers selling off free space to make additional profit for themselves is not improper under current URA (Urban Redevelopment Authority) rules", National Development Minister Khaw Boon Wan said in a blog post on Monday. He has since directed URA to review and fix guidelines on the issue.

Additional measures targeting the resale flat market may also be in the works, said Ms Lee.

"The rise in prices in the mass market over the last two years was (partly) driven by HDB resale prices, with a lot of demand coming from the HDB upgrader segment," said Ms Lee.